A Simple Guide To Amazon's Complicated Advertising Business

AMG, AMS, AAP, ACoS… Trying to keep track of all these Amazon advertising acronyms is enough to make anyone’s head spin. But consumer brands and advertising agencies alike are learning the new language of Amazon advertising as it is set to start competing more directly with Facebook and Google.

Put simply, Amazon Media Group (AMG) is the business team that works with marketers who access the two primary advertising platforms: Amazon Marketing Services (AMS) and the Amazon Advertising Platform (AAP).

Amazon is expanding its digital advertising capabilities, creating more opportunities for brands to market to Amazon shoppers. (Photo by David Ryder/Getty Images)

Advertisers set up and manage campaigns using these ad products either through the AMS dashboard (for Vendors) or via their Seller Central account (for marketplace Sellers). Amazon Storefronts are a recent addition to the suite, and offer a way for brands to merchandise their product assortment on stylized landing pages.

Amazon Marketing Services includes 3 main types of PPC campaigns.Amazon.com

PPC on Amazon is tied closely to revenue. Advertisers can, and should, expect to see a clear return on investment in their PPC campaigns. A common question is what kind of return should be expected, but this is almost impossible to answer on even a product category level, no less a brand or product level. Some brands may see their Advertising Cost of Sales (ACoS) in the single digits for their established, high-performing campaigns, other brands in competitive categories with newer campaigns may be above 50%.

AAP

Amazon Advertising Platform is Amazon’s Demand Side Platform (DSP), and is available as a managed service from Amazon directly, or self-service through accredited agencies. It enables advertisers to reach Amazon’s audiences on third party sites and apps through ad formats including:

Desktop and mobile web display ads

Mobile banner ads

Mobile interstitial ads

Video ads

Amazon Advertising Platform offers a way for brands to target in-market shoppers and other Amazon audiences around the web.Forbes.com

An AAP media buy is the only way advertisers can specifically target Amazon shoppers off of Amazon, and AAP is also the only way advertisers can buy ad space on Amazon’s own websites.

AAP campaigns can be effective with building brand and product awareness. But if a company’s intention is to spend on advertising with a direct impact on sales, AAP may not be the most effective use of their marketing dollars. It’s more suited to companies who understand the nature of brand advertising and are already running display ads on other platforms.

Targeting options with AMS

AMS campaigns are displayed to customers on Amazon.com and its international shopping sites, and targeting is primarily at the keyword level. Product Display advertising campaigns can target specific ASINs (Amazon Standard Identification Numbers).

Sponsored Products advertising campaigns, one of the most popular campaign types in AMS, can be set up as manual or automatic. The former allows the advertiser to specify keywords to target, and the latter asks Amazon to find keywords for the advertiser.

Within manual campaigns, advertisers can target keywords using broad, exact and phrase matches, as well as add negative keywords.

Targeting options with AAP

AAP allows advertisers to break down customers into audience segments based on buyer intent in areas unique to Amazon, such as In-Market and Lifestyle segments.

Amazon core audiences are audiences segments that Amazon pre-builds. They are a mix of behavioral, contextual, and demographic.

In-Market segments include audiences who are currently showing signals that they will soon purchase an item within the category.

Lifestyle segments include audiences who are habitual buyers of the category on a long-term basis.

Contextual segments reach audiences in real time as they search and browse on Amazon.com.

Brands can also remarket to audiences that have searched for their brand or viewed their product pages, or exclude audiences who have already purchased their products.

By incorporating such granular audience targeting options, brands can target potential customers through an assumed future intent to buy, whereas other display advertising platforms are primarily based on keywords, past purchase behavior, or retargeting site visitors. This creates an extremely powerful advertising strategy that goes far beyond simple remarketing.

Amazon’s advertising platforms are still in their infancy

Together, these offerings deliver similar services to what Google and Facebook offer to marketers, however, Amazon is still developing their various advertising tools. In fact, some aspects of the Amazon advertising tool set really seem a few years behind Google’s PPC offerings.

Also, since the AAP and AMS platforms currently have separate logins, data on one platform exists independently of the other. In an advertising world where Google and Facebook offer single-platform integration, this setup is fairly primitive. Amazon is said to be working on merging these platforms to create a more scalable self-service platform for marketers, but the timeline for this is unknown.

Perhaps the most part of Amazon’s growing advertising suite is the possibility of integrating data into a multi-touch attribution that will allow marketers to better define audience segments and target customers through a more holistic approach. This includes targeting at scale across behavioral, contextual, demographic, and geographic targeting – making it an ideal platform for e-commerce.

I am the CEO and founder of Bobsled Marketing, a digital agency that helps consumer product brands to grow and protect their sales on Amazon. Specializing in operations, marketing and advertising on the Amazon platform, I'm watching the profound shift that's occurring for b...